Avangrid Emerges Victorious In $9M North Carolina Offshore Wind Sale

The U.S. Department of the Interior’s (DOI) Bureau of Ocean Energy Management (BOEM) has announced the completion of the nation’s seventh competitive lease sale for renewable wind energy in federal waters.

A wind energy area of 122,405 acres offshore Kitty Hawk, N.C., received the highest bid of $9,066,650 from Avangrid Renewables LLC, the provisional winner, after 17 rounds.

Also participating in the lease sale were Wind Future LLC, Statoil Wind US LLC and wpd offshore Alpha LLC.

Before today, BOEM had held six competitive lease sales, which generated $58 million in high bids for more than 1 million acres in federal waters, including a lease sale for 79,000 acres offshore New York. That auction generated a winning bid of $42.5 million from Statoil.

BOEM says it has been working with the North Carolina Renewable Energy Task Force since 2010 to identify an area of sufficient size for offshore wind development while “avoiding ecologically sensitive areas and multiple-use conflicts.”

The North Carolina lease area, designated OCS-A 0508, begins about 24 nautical miles from shore and extends 25.7 nautical miles in a general southeast direction. Its seaward extent ranges from 13.5 nautical miles in the north to .6 of a nautical mile in the south.

According to the National Renewable Energy Laboratory’s estimates of 3 MW per square kilometer, the lease area has a potential generating capacity of 1,486 MW – enough energy to power more than 500,000 homes. The actual size of the wind energy project will be determined by the developer, notes BOEM.

“The same winds that once lifted the first powered flight above North Carolina’s Outer Banks could soon power thousands, if not millions, of American homes,” says Nancy Sopko, director of offshore wind and federal legislative Affairs for the American Wind Energy Association. “Millions of dollars in private investment drawn to this new ocean energy resource will help North Carolina’s economy take flight – creating new demand for skilled jobs, factories and U.S. flagged vessels.”

The lease will have a preliminary term of one year, during which the lessee may submit a site assessment plan (SAP) to BOEM for approval. The SAP will describe the facilities (e.g., meteorological towers or buoys) a lessee plans to install or deploy for the assessment of the wind resources and ocean conditions of its commercial lease area.

Following approval of a SAP, the lessee will then have four-and-a-half years to submit a construction and operations plan (COP) to BOEM for approval. This plan will provide a detailed proposal for the construction and operation of a wind energy project within the lease area.

Once BOEM receives a COP, it will conduct an environmental review of the proposed project and reasonable alternatives. Public input will be an important part of BOEM’s review process; if BOEM approves the COP, the lessee will then have a term of 25 years to construct and operate the project.

“The success of this lease sale reflects the continued interest of coastal communities to develop their offshore energy resources,” says Ryan Zinke, DOI secretary. “Renewable energy, like offshore wind, is one tool in the all-of-the-above energy toolbox that will help power America with domestic energy, securing energy independence and bolstering the economy. This is a big win for collaborative efforts with state, local and private-sector partners.”

James P. Torgerson, CEO of Avangrid Inc., adds, “We salute the U.S. Bureau of Ocean Energy Management and the Department of the Interior for the professional manner in which they went about the bidding process, reflected by the initial large number of parties that pre-qualified to bid. We are excited to undertake the enormous task before us in bringing this project to fruition and confident in its completion.”